Asta Sihvonen-Punkka Director General of EMA Vice-Chair of ERGEG Baltic Electricity Mini-Forum 1 October, 2010 Jurmala ACER and regulatory empowerment – solving cross border issues

2Baltic Electricity Mini-Forum 1 October 2010 Jurmala General objectives of NRA include cross-border issues Promoting IEM Developing competitive and properly functioning regional markets Eliminating restrictions on trade in electricity between MSs including developing CB capacities and enhancing market integration Ensuring that system operators and users are granted appropriate incentives to increase efficiencies and foster market integration

3Baltic Electricity Mini-Forum 1 October 2010 Jurmala Directives require (art. 38 of Electricity Directive) Regulatory authorities shall cooperate at least at a regional level to promote: optimal management of the network joint electricity exchanges the allocation of cross-border capacity an adequate level of interconnection capacity, including through new interconnection, coordinate the development of all network codes for the relevant TSOs and other market actors coordinate the development of the rules governing the management of congestion

4Baltic Electricity Mini-Forum 1 October 2010 Jurmala Article 37 (6) The regulatory authorities shall be responsible for fixing or approving sufficiently in advance of their entry into force at least the methodologies used to calculate or establish the terms and conditions for…: access to cross-border infrastructures, including the procedures for the allocation of capacity and congestion management.

5Baltic Electricity Mini-Forum 1 October 2010 Jurmala ACER as a last resort If NRAs cannot agree within 6 months or upon a joint request from the NRAs, the Agency shall decide on regulatory issues, which include terms and conditions for access and operational security of cross-border infrastructure Procedure for capacity allocation Time frames for allocation Sharing of congestion revenues Charges levied on users of the infrastructure (merchant lines)

6Baltic Electricity Mini-Forum 1 October 2010 Jurmala Agency’s tasks vis-á-vis the NRAs Pre-decision phase: At NRAs request, provide an opinion on the application of Community legislation (Cion to be consulted) Post-decision phase: Provide an opinion at the request of any NRA or Cion on whether a decision taken by NRA complies Community legislation Follow compliance with the opinion, inform the Cion and MSs concerned

7Baltic Electricity Mini-Forum 1 October 2010 Jurmala Process of preparing regulatory decisions Role of working groups (ACER, NRA experts, EC participation) The Director will submit draft final documents to the Board of Regulators (BoR) The BoR will make its decision, applying voting if necessary (one vote per NRA) The regulatory decisions made by the Director require the assent of BoR